Patrick Durrant | Sydney
On Monday SA’s Defence Teaming Centre (DTC) signed a Strategic Partnership Agreement with Indonesian specialist vehicle manufacturer PT Pindad in Bandung, West Java.
The agreement is unique in that it is the first of its kind between an industry body and an Indonesian company. The document was signed by DTC CEO Chris Burns with the SA Minister for Defence Industries Martin Hamilton-Smith there to witness what marks a significant opportunity for DTC members and the broader defence industry to gain access to the Indonesian and wider Asian Pacific market.
Both men said they were surprised by the extent to which Indonesia had been overlooked, with Burns impressed at how quickly the Indonesians had advanced their technological manufacturing capability in the space of five years.
“They have made the strategic decision to get back into manufacturing their own equipment and they’ve done a great job,” he told ADM.
“PT Pindad warrants attention – as a company with over 2,000 employees, they were servicing and maintaining Leopard tanks when we were there,” Minister Hamilton-Smith said. “They are also producing a wide range of combat vehicles, including both 6x6 and 4x4 variants and exporting them overseas.”
He added PT Pindad were very innovative at keeping existing Indonesian army (TNI) vehicles in good order and up to date.
“They are forecasting 30 per cent revenue growth this financial year and they will be a very good ally,” Minister Hamilton-Smith said.
The SA Government has given the DTC funding in the form of around $2 million over four years to develop programs for export and to investigate the establishment of a cluster. This has resulted in the creation of the Specialist Vehicles Alliance (SVA) that aims to identify business opportunities for suppliers impacted by the decline in automotive work within Australia, while allowing them to diversify by providing their capabilities into other sectors.
“Australian defence industry needs to think outside of the box – for too long now, they have relied on Defence as the single customer and waited for a project to be posted and bid upon,” Minister Hamilton-Smith told ADM.
“The SA Government is firmly of the view that our defence industry companies, in particular the SMEs, have good products which, subject to, international agreements, and sovereign government to government approvals are quite saleable in the region.”
Burns said the agreement allows PT Pindad and the SVA member companies to collaborate.
“By signing an agreement with the DTC, PT Pindad can collaborate with all of our 200 plus member companies,” Burns said. “They can now come to us and say we’re looking for this capability, and then we can field this to our membership as a coordinator/facilitator.”
Previously PT Pindad, as a state owned enterprise, would not have been able to pursue any partnership with an Australian business without the Indonesian Government’s approval, a lengthy process, especially if dealt with on a one-to-one basis.
“It saves them having to come hunting throughout Australia for a specialist capability, and it gives us the access to capitalise upon those opportunities, many of which extend to ASEAN countries with which PT Pindad already does business,” Burns said.
Apart from armoured vehicles, PT Pindad also make specialist vehicles such as logistics vehicles and excavators for the mining industry.
“It’s not just about manufacturing, there’s also a lot of expertise we can bring in terms of through life support, fleet maintenance and sustainment, training and delivering of services,” Burns said.
“Companies that can help them with the automation of their factories, to develop simulation and training systems, fleet management systems, and engine performance monitoring will also benefit.”
The agreement also gives an opportunity for innovation to occur outside of the realm of the big global players, according to Burns.
“Often when you are supplying to the likes of Lockheed Martin, you’re practically building components to spec. This way, you have the opportunity to sit down with the manufacturer and say, ‘I can see where you are going with that, but have you thought about doing it this way?’”
The delegation also visited PT Dirgantara, Indonesia’s indigenous aerospace manufacturer in Bandung, which, according to Minister Hamilton-Smith, has “a vibrant and very impressive aircraft manufacturing and sustainment capability”.
“They are producing a raft of aircraft which they have designed, tested, built and sold, not only to the TNI but also to international markets,” he said.
A process of engagement with PT Dirgantara had commenced, as Hamilton-Smith saw the aerospace industry in Indonesia as being “ripe for collaboration and engagement with the Australian aerospace industry”.
“We have a lot to offer in terms of flight test and evaluation, systems integration, advanced manufacturing, and composite materials,” Hamilton-Smith said.
The DTC will look towards establishing a similar agreement in the future with PT Dirgantara, but for now Burns said “our member companies are excited because this represents another avenue for them to generate work and be innovative – it’s a win- win all round”.