Austal Defense Finalized $680M First Government Contract

Austal announced on Thursday, December 18, that the contract for the Australian Army’s new Landing Craft Medium has been officially awarded, valued at over A$1 billion (US$680 million). The LCM, along with the planned Landing Craft Heavy assignment, is the cornerstone of the expansion of shipbuilding in Western Australia and the company’s selection as strategic shipbuilder for Australia.

The LCM Design and Build Tasking statement contract announced today appoints Austal subsidiary, Austal Defence Shipbuilding Australia, to complete the detailed design and build 18 Landing Craft Medium (LCM) vessels at Austal’s Henderson, Western Australia, shipyard.

Construction of the first LCM is scheduled to commence in 2026, with the 18th and final vessel scheduled for delivery in 2032. The LCM, being built for the Australian Army, will be manufactured in steel and capable of projecting loads up to 80 tonnes.

“This Landing Craft Medium design and build contract awarded to Austal Defence Australia is the first vessel construction program in the Government’s commitment to delivering continuous
naval shipbuilding at Henderson, Western Australia,” highlighted Paddy Gregg, CEO of Austal Limited. “With these 18 Landing Craft Medium and any further vessels planned as part of the Strategic Shipbuilding pilot program, we are developing the shipbuilding capability to build larger, more complex vessels, in Henderson into the future and delivering sovereign shipbuilding capability for Australia."

The company completed in August the Strategic Shipbuilding Agreement with the Australian government. It was a key step after the government selected Austal for the two pilot projects. The agreement launched the new Austal Defense Shipbuilding as a special-purpose subsidiary and put the company in line for significant future projects with the government. As part of the agreement, the government received a special rights Sovereign Share in the new company.

In addition to the LCM contract, the Australian government has designated Austal as the builder of its future Landing Craft Heavy. The program calls for eight vessels based on Damen’s Landing Ship Transport design. It will be a 3,900-tonne displacement vessel capable of carrying more than 500 tonnes of military vehicles and equipment, including Abrams tanks. Fitted with self-defense weapons, it is designed for troop insertion and extraction, as well as logistics operations and humanitarian relief.

Expanding its government relationship is a key part of Austal’s growth strategy for shipbuilding. The company has established relationships in Australia as well as building a broad range of patrol boats for regional operations. It is also expanding its U.S. shipbuilding operations, deepening its U.S. Government relationships.