Press Conference, Canning Vale

SUBJECTS: Landing craft heavy milestone, US submarine supply chain contract, AUKUS submarines.

VEEM CHAIRMAN, BRAD MIOCEVICH: Welcome to Minister Conroy and to Minister Sanderson, welcome to VEEM. We're here today to acknowledge VEEM's first status of receiving the contract under the AUSSQ program to supply components to the Virginia‑class nuclear program. We're the first supplier to [indistinct]. 

I would like to first off acknowledge Tim Brown and the [indistinct] Defence team, HII, and the Australian Submarine Agency for running and backing the AUSSQ program, a program to upskill companies so that they're ready to [indistinct] defence into US. 

So I'd also like to acknowledge our foundry guys, they'll be doing a pour for you shortly. Very highly skilled and we're very proud of VEEM employing a large apprenticeship pool and we're very proud of that. 

So the first, this first supply for VEEM, VEEM's not new to defence, in fact they've been supplying defence components for about 40 years through the programs in the Oberon submarine contract to [indistinct], to the Collins‑class submarine [indistinct] contract. And this next coordinate is critical to the next phase for VEEM. It's the first of many contracts. 

We've found that once you get into the US supply chain they've got a lot of issues in the supply chain and Australia can help, and VEEM is one company that can step forward now, and we expect it to be doing a lot more for the US and UK Defence Industry. 

So this is a very exciting phase for VEEM to shift from a period of one to two years of audits, upskilling in our systems, our processes, putting in place defence‑grade cyber security and then to get to this first order. 

From here we look forward to the company moving further into the US supply chain. So thanks very much and I'd like to now hand over to Minister Conroy. 

MINISTER FOR DEFENCE INDUSTRY, PAT CONROY: Thanks very much, Brad, and a great pleasure to be here at VEEM, a really important defence manufacturer for the Australian Defence Force, already supplying parts to the US Coast Guard, for example. 

Today's announcement is a landmark announcement in the AUKUS program. The AUKUS program is about giving the Australian Defence Force and the Royal Australian Navy the most advanced submarines in the world, and Australia undertaking the most advanced industrial work in managing [indistinct] nuclear powered, conventionally‑armed submarines.

Today's announcement is the first production contract for an Australian supplier to HII, which is the biggest naval ship builder in the United States. HII build the aircraft carriers, the [indistinct] of destroyers and the nuclear submarines for the US Navy. 

Today's announcement is that VEEM in WA is receiving the first production contract for parts with them and that's through the [indistinct] Australian Government funding. 

This contract is just under a million dollars. This is part of much bigger and broader work for VEEM, a much broader and bigger contract [indistinct]. 

AUKUS will drive 20,000 secure high‑paid jobs throughout the country with the majority of those workers being concentrated in WA and SA, and VEEM can now play a critical part of that.

You could say without labouring the point too much that AUKUS is heating up. The future of AUKUS is heating up and we're here in a forge to illustrate that today. This contract will lead to more jobs for Australian workers, more business for Australian suppliers who are the most advanced manufacturers in the world, and it's under our commitment to A Future Made in Australia, a future made in WA in particular. 

I'll hand to Minister Sanderson for some remarks. 

MINISTER AMBER‑JADE SANDERSON: Thank you to Minister Conroy and thanks to VEEM for having us today. This is a landmark announcement, and this really demonstrates the value of [indistinct] to local [indistinct] industry [indistinct]. 

The Virginia‑class [indistinct] program is giving Western Australians [indistinct] US supply chain. VEEM's done an excellent job of leveraging Australian Defence Industry contract [indistinct] and getting into that supply chain. This means that they will continue to employ Western Australians and continue to take on apprentices and train the next generation of industrial workforce to be able to deliver advanced manufacturing, and this is a really [indistinct] example of [indistinct] WA [indistinct]. 

We also know this is a significant [indistinct] that's why the State Government is supporting with a range of grants, companies like VEEM to upgrade their cyber security to go through that accreditation process so that they can get into that supply chain.

We're also supporting [indistinct] benefited from [indistinct] advanced manufacturing and investment [indistinct] which supports companies to invest in infrastructure and equipment to put them in the best possible position to be able to get these contracts. So we very much welcome the news today and we'll continue to support WA's manufacturing sector, local jobs, to be able to deliver AUKUS and the Virginia‑class [indistinct]. 

I'll hand over to Tim from VEEM. 

TIM BROWN, MANAGING DIRECTOR, H&B DEFENCE: Thank you, Minister. It is great to be here today with VEEM and seeing AUKUS in action. The AUSSQ program is a program being executed by H&B Defence working with the Australian Government, State Governments and the Australian Submarine Agency, and we are working with our parent, HII in the US, the biggest military ship builder in the United States, to uplift Australian suppliers to feed into that supply chain and then consequently prepare Australian suppliers for our own submarine program. 

VEEM is at the vanguard of that effort. And that effort, being driven by AUKUS, is really seeing the re‑industrialisation of Australia for our own national security and defence. 

Importantly, VEEM is proving that Australia has the capability and we can match it with the best. 

So to Brad and the VEEM team, well done. And thank you. 

JOURNALIST: Can we just get your name and title [indistinct]. 

TIM BROWN: Tim Brown, managing director of H&M. 

MINISTER CONROY: Thanks Lee. [Indistinct]. AUKUS is real, AUKUS is real, AUKUS is happening right behind us now and the future of AUKUS is really heating up. Any questions? 

JOURNALIST: [Indistinct]? 

MINISTER CONROY: Well I'll seek Brad's ‑ this is the first, we've had hundreds of Australian companies go through a consultation process, and as Brad said that is really, that's actually how it works to qualify for nuclear work. This is the most advanced manufacturing in the world, [indistinct] number of years the Australian Government [indistinct] program. [Indistinct] production contract. So parts made in VEEM go into US made Virginia‑class submarines, not for us but for the US Navy. That's how good the product is that's coming out of [indistinct]. 

MINISTER CONROY: It will support Australians in a helpful way. One, it means that we're ‑ it increases ‑ this means it makes a contribution to us receiving our three Virginia‑class that we are due to receive starting here in 2030. Obviously the US are ramping up their production efforts to produce more Virginias, and so Australian companies helping their supply chain, which is constrained, help us get ours. 

Secondly, companies like VEEM, I don't want to get ahead of future contracts, but companies like VEEM with their supply into SSN‑AUKUS, the submarines that will be built in Australia are starting at the end of this decade. So this is a win/win for Australia; we get our own Virginias, win export work, and then there'll be parts for our own submarines made in Australia. 

SPEAKER: Boss, sorry, we just might pause just to do the pour and then we'll resume, just so you don't miss out on the pour, yeah. 

MINISTER CONROY: Yeah, I'll let Brad talk us through what we just saw, but just before we do that, Brad's informed me that that's all the metal that's going into these parts in Australian [indistinct], Australian supply chain, Australian manufacture and supply around the world. 

Brad, do you want to describe what we just saw ‑‑ 

BRAD MIOCEVICH: Yeah, so here we have a critical fountain. What we're doing is we're taking metals from the molten point, [indistinct] the mould and we then take metal through it and put it through there. Before doing it we test the temperature to make sure that it is at the right pouring temperatue, we've only got a small band. We also test that the gas performs, make sure there's no impurities in the metal. And when we poured it, we poured it very slowly, it's a bit like pouring beer with some of these alloys, we don't want too much turbulence, it leaks oxide [indistinct]. 

What's interesting in the world is that foundries have largely disappeared. Out of Australia we lost a lot commercially offshore, but having the sovereign capability to be able to manufacture parts that can only be done in a foundry, or a forge is really crucial to industry from the ground up. 

3D printing is an area which is exciting and we do some ourselves, but it has limitations. High integrity casting is the optimal [indistinct] manufacturing. We produce the mould digitally, we heat the metal up, we add it in one go, it's done. Very efficient, we have a very minimal amount of excess stock left [indistinct], it goes straight into the machine. So it's a really efficient process. 

JOURNALIST: Can you tell us some of the things that [indistinct]? 

BRAD MIOCEVICH: Certainly. Behind you is an example of some components [indistinct]. The US suppliers [indistinct] but they are a class one casting, high [indistinct] casting which means a failure of the casting is lost through [indistinct]. So they've really trusted us with the supply, as does the Royal Australian Navy with Collins‑class. 

JOURNALIST: [Indistinct] classified that they're not being made [indistinct]. 

BRAD MIOCEVICH: Regardless. Components for each submarine [indistinct] will always classified because they don't want anybody to know the capabilities of the equipment. 

BRAD MIOCEVICH: [Indistinct]. 

MINISTER CONROY: This is a part that will go into the build of a Virginia‑class submarine and as Brad said, Aussie know‑how, the experience that Brad and his team have developed providing parts to the Royal Australian Navy, for example, our submarines, means the US Navy are trusting them to ‑ they're trusting the lives of their sailors on a multi‑billion dollar submarine hundreds of metres under the surface of the ocean where, one thing goes wrong and they're in trouble, they’re relying on Aussie workers to make sure they're safe. That's a great compliment to the skilled workforce here in WA. 

JOURNALIST: Minister, the US is building a Virginia‑class submarine in roughly [indistinct] grade. How confident are you that America will increase production numbers by [indistinct] and deliver the submarines promised to Australia in 2030? 

MINISTER CONROY: I am confident for a couple of reasons. The figure that you quoted is slightly out of date. The US Chief of Navy provided an updated figure to Congress recently that said it's in advance of that, and he's very confident that they will be producing more than two Virginia‑class submarines a year early in the next decade. That's one factor which will determine their availability. 

But secondly, our announcement today is another reason why I'm confident about it, because we're not just ‑ they're not just mobilising the US industrial base, they're mobilising the Australian industrial base. 70 per cent of the parts that go into a Virginia‑class submarine only have one supplier. So that's a critical weakness. That's why [indistinct] suppliers in Australia, the supply chain increases their production rates, increases the chances of ever hitting those targets, and increases the chances we'll get our submarine. 

The second is we get more jobs in Australia out of this. We get about 20,000 high skilled, well‑paid, secure jobs for Australians, and it's producing equipment for us, the US Navy and the UK Navy. 

JOURNALIST: [Indistinct]. 

MINISTER CONROY: Well we should have made money from both. So we've said that we're making a contribution to the US industrial base of $3 billion US. That's part of an effort by the US to put $17 billion in, and it's putting its proportionate share, and that would then obviously increase that industrial base so that there will be Virginia‑class submarines available to be transferred to Australia. But we're putting in north of $30 billion into our own industrial base. 

To give you a couple of examples well in excess of $30 billion. The Henderson maritime precinct, the cost over the first decade will be about $25 billion. The cost of the shipyard in Osborne will be tens of billions of dollars as well. 

So the majority of that funding is going to Australia, but we're making small investments in the US and in the UK [indistinct]. 

JOURNALIST: Can I ask why aren't they building them in the US and why they're doing it here in [indistinct]? 

MINISTER CONROY: Well, they're doing both. 

JOURNALIST: Right. 

MINISTER CONROY: As I said, the US Government is putting $17 billion into expanding their industrial base. They're building 34 satellite factories. I was at a HII satellite factory in South Carolina in July this year, which is adding one and a half million man hours to the production run. So they're investing in the US but they're also investing in Australia because we're partners and it's Australian companies that can do brilliant work. 

Whether it’s Veem here, I made an announcement of Hofmann Engineering down the road, [indistinct] say "down the road" but nearby, they're doing great work as well in terms of gear boxes. 

JOURNALIST: [Indistinct] US Army [indistinct] going on at the moment but the [indistinct] in the Middle East.  Are you concerned that they might not follow through with everything? 

MINISTER CONROY: Not at all because the US nuclear attack submarines, the Virginia‑class, are their most advanced submarines in the world to provide deterrents in a [indistinct] nuclear‑equipped submarines, they're nuclear‑deterrent. But the Virginias are an essential part of the US Navy's deterrence factor, and they're very committed to it, and it's bipartisan. 

I was in the US Senate in 2023 when the AUKUS legislation passed with an 80 per cent Yes vote. That is incredibly bipartisan and that's why I'm very confident it will go ahead. We're putting billions of dollars into it, because it's critical for their national security as well as our own. 

JOURNALIST: [Indistinct]? 

MINISTER CONROY: Well I want to be careful about getting ahead of ourselves, but it's fair to say what VEEM do is unique, and again, we're not in a position of placing contracts [indistinct] in SSN‑AUKUS yet but VEEM wants to say it's an excellent position. If you think about it, they've supplied parts to the last two Australian classes of submarine, the Oberon‑class and the Collins, and they're supplying for the Virginia. 

So I don't want to do their own marketing, I don't want to do the marketing for them, but they're in a pretty good position to make a case for SSN‑AUKUS. 

JOURNALIST: [Indistinct]. 

MINISTER CONROY: I'll invite Tim to make a contribution, but the Australian Government is funding two different qualifications processes where we fund and pay for Australian companies to qualify for this work. So whether it's VEEM or Hofmann Engineering, we qualify for them to go through a very stringent process to qualify for nuclear work. Then the US Navy contract through their two submarine builders, [indistinct] and HII, to build more submarines, and then each of those submarine builders at least [indistinct] before and VEEM won that work on their own merit. 

Tim, you might want to add, I'm not sure. 

TIM BROWN: Thanks Minister. That's correct, and the AUSSQ program is about uplifting the Australian suppliers to the standard required. We then give those suppliers effectively to HII and then they go into the mix [indistinct] and at this stage they've been successful and that is a great start. 

JOURNALIST: [Indistinct] how many [indistinct]? 

TIM BROWN: This is the first. 

JOURNALIST: This is the first. 

TIM BROWN: As I said, VEEM is the vanguard of this program moving forward, and I'm sure in years ahead we'll see a lot more of these [indistinct] and it will become business as usual for Australia. 

MINISTER CONROY: And [indistinct] asked, I think you'll see very shortly the next supplier [indistinct]. I should point out that Australian companies [indistinct] process [indistinct] Defence's natural environment. There's a separate process [indistinct] where we qualify companies as well, and we've already announced the first contract awarded to them. 

One example is Bisalloy Steel who make specialist steel in Illawarra, New South Wales, supplying electric [indistinct] to the other submarine manufacturer in the US is steel, which is the first one they've awarded for HII, it's the biggest Naval construction yard in the United States.

JOURNALIST: When will works start? Will they start [indistinct]? 

MINISTER CONROY: When ‑‑ 

BRAD MIOCEVICH: [Indistinct] in place and we're confident [indistinct]. 

JOURNALIST: How many people are working? 

BRAD MIOCEVICH: We've got about 200 people here, so directly on that contract in the order of [indistinct] people. 

JOURNALIST: [Indistinct] parts? 

BRAD MIOCEVICH:The parts are [indistinct]. 

JOURNALIST: Can you just run through some of the requirements they have to meet to get accreditation, the cyber security and the uplifting of [indistinct] manufacturing? 

BRAD MIOCEVICH: Yes. So the cyber security [indistinct] is a major concern so we'll be working with the Australian Signals Directorate. We have to get Australian Standards [indistinct] accreditation and then working with both HII and the US Navy to meet their requirements. 

Suffice to say it's a two‑year program, it will employ four staff full‑time [indistinct]. So cybersecurity itself is massive. Uplifting our quality systems to meet the nuances of the nuclear program. We've been accredited. We operate in a highly controlled, accredited environment for Aerospace and Defence already, but the US Nuclear Program has its own requirements. So we had to spend considerable time upskilling for that. So, all in all it was over the last [indistinct] years. 

JOURNALIST: We just need the spelling [indistinct]. 

BRAD MIOCEVICH: Sure, NIOCEV [indistinct]. 

JOURNALIST: [Indistinct]. 

BRAD MIOCEVICH: Jim. 

JOURNALIST: Thank you. 

BRAD MIOCEVICH: Is there a question for the Minister? 

JOURNALIST: Minister, would you ‑ sorry. It's a relatively small contract, but can you explain the significance of what this means for the future [indistinct]? 

AMBER‑JADE SANDERSON: Well this is relatively small in Defence terms, but I think, as has been outlined, this is really that AUKUS is here. This is obviously going to make sure that Western Australian parts are critical to the build of the Virginia‑class. The sustainment and rotation program for the Virginia will make sure [indistinct] existing Australian Defence capability and reputation. They've been able to enter what is a critical supply chain. 

This gives companies like VEEM the confidence to build more apprentices into the system, to actually have a pipeline of workforce. Good, high‑paying, good quality, skilled jobs in advanced manufacturing. This is the future of the growth of our economy, of our economic future and you'll have seen this today. 

JOURNALIST: We want to ask just more about anything happening in the US and your views on that, are you concerned at all [indistinct]? 

AMBER‑JADE SANDERSON: Look, our role as Western Australian Government is to support the Federal Government's plans for AUKUS and to make sure that West Australians get those opportunities. That is our role, that is what we are focussed on, to ensure that businesses like VEEM, companies like [indistinct] where we were this morning, are employing local West Australian workers and that is our focus. 

JOURNALIST: Do you know how many more additional workers would be needed for this program? 

AMBER‑JADE SANDERSON: Going to need around 10,000 more workers in Defence Industries up to about 2035. We know that this is going to be the biggest area of growth in our economy. It is an important part of our economic diversification plan. It's going to be number two by at the latest 2035. So we're going to need at least 10,000 more workers in Defence Industries, and we've been working across [indistinct] to make sure we've got the training pipeline, the employers prefer to take on apprentices, and the Government is continuing to support [indistinct] standards. 

JOURNALIST: How can you be sure that they're not being used for other industry [indistinct]? 

AMBER‑JADE SANDERSON: Well, you know, people have their own decisions in life. What we're doing is making sure that each sector has its own training plan, that large companies, [indistinct] companies, large civil contractors are employing their own apprentices and [indistinct]. We're supporting Defence with GTOs, with supports [indistinct] to take on more apprentices, about $100,000, more apprentices [indistinct] take on apprentices, focus sector by sector to make sure they have the right setting to train the [indistinct]. 

JOURNALIST: Thank you. 

ENDS