Page 56 - Australian Defence Magazine June 2022

56 SMALL TO MEDIUM ENTERPRISES DEFENDTEX
JUNE 2022 | WWW.AUSTRALIANDEFENCE.COM.AU
point that it can be demonstrated, to the point that it can be mass-produced. And typically, the company will either fold or it’ll be acquired by a prime. And we lose sovereign capability when either of those two things happen.
That’s the other thing that really gets my back up – this definition of sovereign capability. I hear certain primes be- ing referred to as an Australian company, but having an ABN and employing people in Australia does not make you an Australian company. Not long ago, for example, I saw a site talking about Australia’s sovereign hypersonic capabil- ity and it had three companies called out – none of them were headquartered here in Australia.
There is this belief either that we can’t do it or that we shouldn’t do it, or that in the name of interoperability, we should go with something that is manufactured by an ally. Therein is the problem and the disconnect between Aus- tralian sovereign industry capability. Producing welders and skilled labour isn’t sovereign capability. Unless you have the ability to influence the intellectual property, unless you have the ability to manufacture everything on site – buying a missile seeker from America and assembling it into a rock- et here in Australia is not sovereign capability. It’s sovereign assembly. I don’t believe there is consensus in the Australian defence industry as to what constitutes sovereign capability.
ADM: What’s your definition of sovereign capability? REDDY: Control over the underlying intellectual property in addition to design and local manufacture.
ADM: How is DefendTex trying to achieve that?
REDDY: We’re vertically integrated. We don’t work with the primes, typically. We forge our own path because we want
ABOVE: DefendTex’s leading and most evolved family of products is in the loitering munitions space.
DefendTex has set up its own international offices and has direct engagement models with UK MoD and US DoD
to maintain control over our destiny and control over the intellectual property that we develop. If we become a com- ponent that sits on someone else’s system and then they sell that through their global supply chain, then we end up lost in the noise. So, rightfully or wrongfully, we’ve set up our own international offices. We have our own direct engage- ment models with UK MOD and US DOD, and we’re look- ing to forge a brand in our own right.
The other concern I have about the primes is that if DefendTex was to be part of their supply chain, the price would increase significantly, because the cost of doing business with a prime is so high. DefendTex solutions are designed to be relatively low-cost, so that our technology gets into the hands of the warfighter. If something becomes expensive, then it doesn’t get into the hands of the frontline combatant, which is central to our company mission.
ADM:How does all this pose a challenge for the Austra- lian defence sector as a whole?
REDDY: You can take the Sovereign Guided Weapons pro- gram as a good embodiment of the challenges. There’s a significant amount of money that’s going to be spent over the next 20 years acquiring guided weapons systems. The government has committed several billion dollars to establish the Sovereign Guided Weapons and Explosive Ordnance Enterprise (GWEO) here in Australia. But by all accounts, it appears that what GWEO will be doing is bringing a prime to Australia so they can employ more people for local assembly.
I understand that the Build to Print model is important, but it doesn’t address a core issue that if we go to war, our supply chains will be cut. The seeker is not made in Austra- lia or designed in Australia, so the ability to substitute out of stock components and to write new software for it or to integrate new platforms doesn’t exist, and without that we don’t have sovereign capability.
I believe 10 per cent of the Sovereign Guided Weapons program should be invested in R&D, so that a sovereign solution can be developed in parallel.
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