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Defence Industry Australia

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					Defence Industry
Melbourne, Victoria, Australia
Through technical know-how, advanced manufacturing capability, broad technical skills and training and strong financial institutions, Victoria can boast a significant competitive advantage in the defence industry sector. In Victoria, key international and domestic companies, as well as many small and medium businesses, provide a diverse range of defence products and services and undertake major defence industry projects. Our highly skilled workforce, superior manufacturing industry and outstanding research and development (R&D) sector makes us: – the lead State for the Joint Strike Fighter project – world-class in aerospace design and manufacturing for global supply chains – Australia’s pre-eminent military combat vehicles designer and manufacturer – expert in complex systems support – the leader in naval systems design, engineering, support and shipbuilding, and – the lead manufacturer of munitions. Strategic location Victoria’s time zone bridges North American and European working hours and provides ready access to the Asian market. Melbourne also has the largest 24/7 freight and passenger airport in Australia. Melbourne is Australia’s largest and busiest container sea-port, handling 37 per cent of container trade. There are additional well-serviced container ports along Victoria’s coastline. Melbourne is a vibrant centre for economic activity and acts as a transport, manufacturing and service industry hub in Australia. Innovation Victoria is Australia’s knowledge, innovation and technology capital and the national leader for business R&D, with more R&D scientists and engineers per capita than the UK, Singapore and Germany. Melbourne is home to a large cluster of research institutes, universities, Cooperative Research Centres and technology parks, able to provide your business with the latest in technological developments. Skills More than 150 different languages are spoken among Victoria’s population of over 5 million. Of our 2.3 million workers, 46 per cent are under the age of 35 and come from a diverse base of cultural backgrounds. Victorian defence businesses employ more than 1500 professional engineers 2300 technical non-professionals, 475 project managers and 1000 professional non-techncial staff. Victoria has Australia’s largest share of university graduates capable of sustaining a strong defence industry. In 2005, Victorian universities had 20,182 students studying engineering and related technologies (31 per cent of the national total) and 22,376 studying information technologies (35 per cent of the national total). The Victorian Government invests over $1 billion annually in the TAFE training system and is committed to ensuring that skills development better matches industry needs. Critical changes have been made to focus training on delivering the knowledge and skills for innovation-led growth. In the 12 months to March 2006, there were 45,400 apprenticeships and traineeships completed in Victoria – 32.2 per cent of the national total and the largest number of all states and territories. Victoria has Australia’s largest concentration of education and training facilities for aerospace engineers and technicians.

Features of the industry Victoria’s defence industry has an annual turnover in excess of $1.2 billion and employs more than 10,500 people. The major sources of defence industry activity (turnover) in Victoria in 2005–06 were: Naval shipbuilding and repair Aerospace structural design and manufacturing Weapons and Ordnance Aerospace Electronics Land vehicles Non-aerospace electronics Aerospace maintenance and overhaul $400 million $240 million $200 million $140 million $85 million $80 million $75 million

These figures represent the core of Victoria’s defence industry – about 150 large, medium and small companies that are significant suppliers to the defence market and who generate a significant proportion of their turnover in this area. Half of Australia’s defence businesses have operations in Victoria where nearly half the defence industry workforce is employed. Major international defence companies operating in Victoria include AAI Corporation, Ball Aerospace and Technical Corp., BMT Defence Services, Chemring, Boeing, Thales, BAE Sytems, General Dynamics Systems, GKN Aerospace, Lockheed Martin, Radio Frequencey Systems and Thyssenkrupp Marine Systems. More than 800 Victorian firms also supply goods and services to defence businesses, with many more involved on specific projects.

Table 1. Capabilities held in Victoria’s defence businesses Capability % of Tier 1 companies with this capability in Victoria 69 58 63 32 11 58 26 % of SMEs with this capability in Victoria 60 29 55 14 8 42 13 % of total industry with this capability in Victoria 62 34 57 18 9 45 15

Manufacturing Design Systems and software Training and simulation Human protection and performance Logistics and support Service provider

Diversified The Victorian defence industry is diverse, globally integrated and internationaly competitive. 87 per cent of companies generate revenue outside the defence market, a much higher degree of diversification than Australian other states. Table 2. Indicative annual turnover by customer Victorian defence industry core (150 businesses) Australian supply chain defence projects International supply chain defence projects Foreign National defence acquisitions Non-defence market Direct supply to Australian Defence Victorian non-core defence businesses (2000 businesses) Direct supply to Australian Defence (1500 businesses) Supply to Primes/Tier 1’s for defence projects (500 businesses) $620 million $400 million $50 million $900 million $130 million $2.2 billion Not measured

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Two-thirds of national defence exports

Productivity In 2005-06, the average turnover per employee for all Victorian defence businesses was $193,000. Prime/Tier 1 productivity was $171,000 per employee while SME productivity was over $250,000 per employee. Exports Three-quarters of Victoria’s defence businesses export both defence and non-defence goods and services and in 2005–06 this was valued at $1.05 billion, or around 6 per cent of Victoria’s total exports. Victoria’s annual defence exports account for more than two-thirds of Australia’s $600–700 million total.

Plan for the Future The Victorian Government has identified defence as a priority sector, and is working with industry to maintain its position as globally competitive and at the centre of Australian defence industry capability. The Government’s strategic action plan (A Roadmap for Victoria’s Defence Industries) articulates the direction that will be taken to capitalise on industry opportunities over the next decade. The priority areas of opportunities are: – development of systems support centres for global support – autonomous systems design, development and support – network centric warfare/electronics and software systems development and support – development and support for the Joint Strike Fighter, unmanned vehicles and life extension of aircraft – military vehicle design, manufacture and assembly – advanced shipbuilding capabilities, especially in the areas of ship design and integration of naval platform systems – application of leading edge defence industry capability to related homeland security markets – aerospace, warship and other defence equipment maintenance and repair services. The Roadmap is available at business.vic.gov.au/defence

The Victorian Government provide a range of networks, programs and initiatives to support new and existing businesses in Victoria. Invest Victoria and the Department of Innovation, Industry and Regional Development, through its dedicated Defence Industry Unit, provide a gateway for accessing information and assistance. investvictoria.com | business.vic.gov.au/defence


				
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