This summer the Australian government awarded UK firm BAE Systems a contract to build nine next-generation frigates – known as the ‘Future Frigates’ project – worth A$35 billion, said a research report written by Moore Stephens' Michael Simms & Grant Miles.
The programme, which will run for over 20 years, will create around 4,000 direct Australian jobs and give a particular boost to South Australia and the shipyards of Port Adelaide. Construction of the frigates is scheduled to begin in Adelaide from 2020, with the first vessels delivered in 2027 and the last by 2042.
The news followed the earlier awarding of a contract to French company DCNS to deliver 12 submarines, replacing the existing Collins Class boats. This A$50 billion Future Submarines programme will run for around 10 years.
Considered together, the two projects represent an investment of A$85 billion, with Australian industry content expected to account for up to 70% of the total.
“There are clearly opportunities for UK and continental European businesses to provide specialist products and expertise that cannot be sourced locally,” says Grant Miles, managing director of Moore Stephens South Australia. “But there are also real opportunities for UK and European businesses to win a share of the ‘local industry’ contracts. UK and European businesses are already forming joint ventures with Australian companies to work together under an Australian flag.”
Local businesses are seeking UK and European partners that offer specialist knowledge, skills and experience to help win contracts in the Future Frigates and Future Submarines supply chain.
This appetite creates excellent opportunities for UK businesses with specialist strengths in the ship-building and defence sectors. “The longevity of the Future Frigates and Future Submarines projects offers a real strategic opportunity to develop a long-term presence in Australia,” Grant says.
Setting up operations in South Australia has many advantages. “The region has a stable government, great infrastructure and transport corridors, and ample industrial land with low-cost commercial leases,” Grant says. “There is a skilled and educated workforce – but low living costs result in relatively low labour costs. There is also a strong culture of innovation, as indicated by a number of specialised, world-class research and innovation districts including the Tonsley Innovation district and the Techport naval hub.” An attractive lifestyle awaits expats too, with affordable housing, good schools and a good climate.
Moore Stephens South Australia, based in Adelaide, has strong relationships with local businesses in the region. The firm is a member of the Defence Teaming Centre, a nationally-focused organisation bringing together businesses involved in supplying and supporting Australia’s defence capability.
“Our doors are open to any UK and European business interested in tapping into the opportunities presented by the Future Frigates and Future Submarines projects,” Grant says. “We offer all the services associated with a leading accounting firm, from audit and tax through to advisory and risk management services. Our particular strength lies in the local relationships we can help you build.”