Tech: Precision welding firm K-TIG flags potential of major defence projects, shares rally
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Shares in precision-welding company K-TIG (ASX:KTG) ripped higher this morning, on the back of a new partnership agreement linked to major defence projects.
K-TIG has signed a memorandum of understanding (MoU) with Axiom Precision Manufacturing and Bisalloy Steels, to develop a joint capability for advanced steel welding for the Australian Defence Force’s LAND 400 project.
Bisalloy will be responsible for the supply of steel, and Axiom will run the welding function which will be based around “the keyhole TIG processes developed and commercialised by K-TIG”, the company said.
The three companies will work together to create a “sovereign capability” tied to advanced steel manufacturing.
K-TIG said that in developing that capability, the group would have an improved opportunity to participate directly in major defence projects such as LAND 400.
The company described LAND 400 as a $10-15bn initiative to build a replacement fleet of light armoured vehicles and M113 armoured personnel carriers.
Investors approved of the potential opportunity for the business, sending K-TIG shares more than 40 per cent higher at the opening bell before the stock eased back.
Axiom has existing customers in the defence industry, as a parts maker in Australia for Collins Class submarines. It’s also the “sole provider to BAE Systems for the vertical tail components for the F-35 Strike Fighter”, K-TIG said.
K-TIG chairman Stuart Carmichael said the company was excited to partner with “two established Australian Department of Defence contractors”.
“K-TIG will be responsible for the development of a keyhole TIG welding process for high carbon steels typically used in the defence industry,” Carmichael said.
Data analytics firm Constellation Technologies (ASX:CT1) also rose strongly on some positive news out of China. The company said its fully-owned subsidiary has landed its first China-based contract — a $480,000 deal with a Beijing-based environmental monitoring company.
The subsidiary will operate a management system based on data collected from sensors at “33 drainage outlets that discharge into natural water courses”, the company said. Constellation Technologies said it’s encouraged by a “strong pipeline of potential contracts in China” over the next 12 months, as a result of stricter environment policy standards implemented by government authorities last year.