Special Report: The company took the opportunity to demonstrate its capability as a globally competitive manufacturer for the defence industry.

As a leading manufacturer of propulsion systems for unmanned aerial vehicles (UAVs), WA-based Orbital UAV (ASX:OEC) exports its products and technology to a global customer base.

But having established a first-mover advantage in the field, the company is also well positioned to capitalise on opportunities in the domestic market.

In that context, Orbital yesterday hosted federal Minister for Defence Linda Reynolds at its Perth headquarters for a more detailed discussion about the application of its technology.

The meeting followed news of a renewed commitment to defence spending by the Morrison government, reflected in the release of its 2020 Force Structure Plan (FSP) – a blueprint for Australia’s defence strategy and what applications are required to achieve it.

Senator Linda Reynolds visits Orbital Corporation ASX:OEC
Minister for Defence, Senator The Hon Linda Reynolds visits Orbital UAV headquarters in Perth, WA (pic: supplied)


Minister for Defence Linda Reynolds visits Orbital UAV
The Hon Senator Linda Reynolds at Orbital UAV headquarters (pic: supplied)

 ‘Sovereign capability’

As part of the FSP, the government earmarked up to $700m in spending on UAV technology over the next 10 years, along with an additional $1.3bn towards unmanned systems for maritime environments.

Speaking with Stockhead, Orbital CEO Todd Alder said the meeting with Minister Reynolds was part of an initiative by the government to improve its understanding of Australia’s in-house defence networks.

“If you look across the defence forces – whether it’s army, navy or air force – they’re all working on developing a more advanced UAV capability,” Alder said.

“So in that sense I think it was reassuring for the Minister to see an Australian company that already builds the back half of some of the world’s best tactical drones. In effect it’s a sovereign capability, not only for Australia but also our strategic partners.”


Domestic market opportunity

Orbital’s strategic focus on drone propulsion systems has allowed it to book long-term contracts with some big names in global defence, including Boeing subsidiary Insitu and Northrop Grumman.

But as Australia prioritises its own defence spending amid an increasingly complex geopolitical environment, Alder said Orbital is an example of a globally competitive manufacturer with a local base.

“We’ve built a global customer base because of our capability to provide high-level propulsion systems,” Alder said.

“But I think (the meeting) was also an opportunity to demonstrate that the government doesn’t have to be looking at overseas tenders, when we’ve got some of the best propulsion systems being designed and manufactured right here.”

It adds up to an exciting new development for Orbital, which has seen its share price rise by almost 200 per cent since the start of the year.

And with a global customer base already in place, the company is well placed to take advantage of potential opportunities in the domestic market.



This article was developed in collaboration with Orbital, a Stockhead advertiser at the time of publishing. This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.