Quickstep signs MOU to advance to $700m plus Joint Strike Fighter Manufacturing Contract
• Quickstep signs Memorandum of Understanding (MOU) with global aerospace corporations Lockheed Martin and Northrop Grumman to build key components for the Joint Strike Fighter (JSF)
• The proposed contract is valued at in excess of $700 million over 20 plus years
• Signing of a final Long Term Agreement (LTA) scheduled for March next year
• Other contracts to supply JSF components under discussion
Australian advanced materials company Quickstep Holdings (ASX:QHL) is pleased to announce that it has signed an MOU with global aerospace corporations Lockheed Martin Corporation and Northrop Grumman Systems Corporation intended to secure in excess of $700 million worth of potential contracts to manufacture components for the new multi-nation Joint Strike Fighter (F-35 JSF or JSF).
The JSF is an advanced composite 5th generation fighter, which represents a quantum leap in technology and capability. The Australian Federal Government is planning to acquire up to 100 of the aircraft and has been highly instrumental in generating this opportunity for Australian industry. Securing the contract would position Quickstep at the technology forefront of the global composites industry.
The MOU signed by Quickstep, Lockheed Martin and Northrop Grumman follows extensive discussions between the parties about the manufacture of components for the JSF utilising advanced composites. It paves the way for the parties to work together to finalise an LTA for Quickstep to supply 19,325 composite doors and access panels. These parts will all be exported to the United States for incorporation into the Joint Strike Fighters globally. Quickstep hopes to complete the LTA by March 2010.
Under the contract Quickstep may supply up to 21 different components under the LTA. The parts include lower side skins, maintenance access panels, F2 fuel tank cover, lower skin and in-board weapons bay doors. The potential manufacturing contract under the LTA is planned to last between 20 and 30 years and could generate annual turnover of $50 million by 2015.
Quickstep Managing Director Philippe Odouard said the MOU was a major milestone in the transformation of Quickstep because it opened the door to not only a substantial JSF contract, but also to other potential defence and aerospace contracts, further validating the time and investment Quickstep has put into preparing its production facility over the past 3 years.
The potential value of the LTA to Quickstep and to Australia cannot be overstated, Mr Odouard said. As well as generating hundreds of millions of dollars in export revenue, the LTA could lead to world-class training opportunities in the highly advanced industry of aerospace composites. Australia is ideally placed to carve itself a much bigger slice of the global defence market. The LTA could be the perfect start to that process.
As a minimum, the $700m LTA would create about 156 high-end jobs, including technicians, engineers, machine operators and quality assurance experts and may create a further 620 support industry jobs.
Mr Odouard said Quickstep was competing with global suppliers to win the manufacturing package. It is pleasing to see that an innovative emerging company was able to secure the MOU against highly respected multinational corporations. The LTA would be one of the largest awarded to Australian industry by the manufacturers of the JSF, he said.
Mr Paul Johnson, Chief Executive Officer of Lockheed Martin Australia, said the Industrial Participation program for the F-35 Lightning II Joint Strike Fighter program had already generated over $200 million for 25 Australian companies and that his company was continuing to work closely with the Federal and State Governments to identify further opportunities for the Australian defence industry.
"The signing of these Memoranda of Understanding with Marand and Quickstep is a major step forward in our best value-best price Industrial Participation program and we look forward in the coming months to assisting them to successfully conclude the contracts for which they will be bidding. They are substantial contracts and represent a new phase of our Industrial Participation program, taking the local defence industry to a new level on the world stage," Mr Johnson said.
Mr Odouard said Quickstep was in discussions with other parties concerning further possible JSF-related contracts.
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