Developing defence exports

Exports are an unavoidable and necessary part of a globalised economy, and participants in Western Australia’s defence sector would be wise to consider the potential opportunities.

The state government, through the Jobs, Tourism, Science and Innovation (JTSI) international investment and trade division, offers support for businesses seeking to export.

A JTSI spokesperson highlighted to Business News the government’s efforts to leverage WA’s geo-strategic location to increase exports of defence technology, equipment, and expertise, in recognition of increasing opportunities for the WA defence industry.

JTSI further confirmed that the rapid advancement of military technology globally leads to further investment in military capability from countries in Australia’s region, including India, Japan, and South Korea (three of the largest defence markets in the world).

Formal comments from JTSI also suggest that, while current supplies to those nations come from the US, Australia’s position as a reliable trade partner bodes well for WA businesses seeking to enter those markets.

Data provided by the Department of Defence confirms the market potential. The Defence Export Strategy estimates the value of Australian defence exports is between $1.5 billion and $2.5 billion per annum. As is common in the sector, all defence and dual-use goods are subject to export control legislation.

The DoD has established the Australian Defence Exports Office (ADEO), led by Australia’s defence export advocate David Johnston, who is a passionate supporter of industry with strong interest in, and memory of, highly technical Australian capability.

A defence spokesperson notes that: “The ADEO works closely with staff at overseas posts, such as defence attachés, and leverages Austrade’s overseas presence to help Australian companies position themselves in overseas markets.”

There are challenges for businesses seeking to export their defence-related capability. Defence rightly states that: “Achieving export success is challenging, particularly for those who have not provided services or products to the ADF. Entering into defence supply chains requires forming new client relationships and adapting to new value networks.”

Hence, DoD recommends that businesses engage with the ADEO, drawing upon its capabilities, networks, and events.

There have been several success stories in recent times. Export Finance Australia (EFA) helped Austal secure a contract worth more than $US70 million for two Cape class patrol boats with the government of Trinidad and Tobago.

A Queensland company called Gaardtech secured a $1.7 million contract with the British Army following a ‘team defence Australia’ delegation to the 2019 UK Defence Security and Equipment international tradeshow.

According to the defence spokesperson, like-minded nations such as the US, UK, Canada, and New Zealand represent Australia’s largest defence export market due to their close and enduring relationships.

Additionally, Australia is strategically positioned to export to key regional partners such as Singapore and Japan.

Businesses must consider additional factors such as government procurement policies, legal frameworks, commercial risks, and intellectual property risks to determine the suitability of any single market, but the point remains clear that export potential is significant.

Defence also points to the role exports could have in foreign diplomacy, where: “Exporting to our allies strengthens our bilateral relationships and the ability to shape and influence our strategic environment”.

Relative to our North Asian allies, generating bilateral relevance is of considerable diplomatic value for several reasons.

Perhaps the last word is best left for Australia’s defence industry minister, Melissa Price.

 “I am working hard with all Australian companies – particularly WA companies – to promote their products and capability to the world,” Ms Price told Business News.

“It was particularly pleasing to meet with WA companies at the recent Land Forces 2021 international exhibition in Brisbane.

“The sky is the limit for the likes of Orbital UAV and Dongara Marine, and it was great to see them showcase their capability on the world stage at such an important event.

“As with all Australian companies, I will leave no stone unturned in ensuring WA’s defence industry has the strongest voice possible on both the domestic and international stages as part of Australia’s internationally competitive defence industry.”