EOS lands $410m defence contract

EOS lands $410m defence contract


The new EOS 30mm remote weapon system integrated with the U.S. Army JLTV. Source: Supplied.

• The Australian
• 10:20AM January 30, 2018
• David Swan
  
  Reporter
  @swan_legend
  

ASX-listed defence tech outfit Electro Optic Systems (EOS) has won a $410 million contract that will see it supply remote weapon systems to an undisclosed overseas customer.
The contract, which will brings sales of the R-400S-Mk2 system to $600m in its first 12 months of release, was announced this morning at a Canberra ceremony by the minister for defence Christopher Pyne, and follows the government’s announcement yesterday of a new $3.8bn defence fund.
“This new weapon system was initiated in 2005 under a US Army contract to develop next-generation weapon systems,” EOS CEO Dr Ben Greene said at the ceremony.
“After seven years of development and four years of testing around the world in many harsh environments, the new system entered production in 2017.” This innovative technology for the first time allows 30mm cannon systems to be deployed with unprecedented accuracy on light vehicles, significantly enhancing lethality and protection without compromising mobility, and at low cost. It meets and overmatches current threats.”
“All $600 million of new contracts are deliverable in monthly shipments from 2018-2022 and follow-on awards for additional equipment, spare parts, servicing and support are expected.
Dr Greene said EOS is also negotiating contracts with other customers who have completed their tendering process and already selected EOS, with further awards likely.
He said the Australian Army is equipped with several hundred EOS systems, which he said enhanced the soldiers’ protection and lethality in Afghanistan.
“A large proportion of these have already been upgraded by EOS with the new technology, which gives Australian forces a significant operational advantage which other countries are only now acquiring,” he said.
“EOS and its many Australian employees are proud of the contribution they make to our Defence Force personnel. The support of the Commonwealth has been very important. [Australia’s export agency] EFIC has provided significant project finance, and DFAT and Australian Embassy staff have efficiently co-ordinated complex licencing issues with their US counterparts.
“Finally, Minister for Defence Industry, the Hon. Christopher Pyne MP has visited foreign capitals with me to provide assurance of Australia as a reliable defence partner and supplier to its allies. This effort and support is acknowledged.”
The news comes as Prime Minister Malcolm Turnbull yesterday unveiled a $3.8bn defence fund, to be set up within EFIC.
EFIC provided assistance to EOS for this contract via a working capital facility and finance guarantee.
Minister for Trade, Tourism and Investment, Steven Ciobo MP, said EFIC’s support was a demonstration of how the government was assisting Australian advanced manufacturers to become exporters.
“The trade finance EFIC provides is helping Australian businesses like EOS export their products and services to the world. Their success will create and sustain Australian jobs,” Mr Ciobo said.