$10m for Victorian SMEs targeting Hanwha contracts

Brandon How

The Victorian government will make $10 million available to the local defence supply chain to help them win contracts with South Korean giant Hanwha Defense Australia.

The funding will be available through two Victorian Land Systems Fund grant streams. These are a targeted investment stream as well as grants of up to $100,000 for small to medium-sized businesses accessible through the Supply Chain Uplift Program (SCUP).

Capability boosting activity supported under the grants program includes upgrading business systems and facilities, gaining international accreditations and certifications, or undertaking research and product development.

Hanwha, South Korea’s largest defence manufacturer, is supplying the Commonwealth government’s $1 billion LAND 8116 Protected Mobile Fires project to build and maintain 30 self-propelled howitzers and 15 armoured ammunition resupply vehicles, in addition to supporting systems.

SCUP applicants must supply to LAND 8116 and requires support from Hanwha in their grant proposal. The Victorian business must also match the grant funding. Applications will be reviewed by the Supply Chain Uplift Program Assessment Panel, which will then make funding recommendations.

A variant of the K9 self-propelled howitzer will be built for Australia. Image: Hanwha Defense

SCUP is being administered by the Department of Jobs, Precincts and Regions. According to the program guidelines “the Department’s and Minister’s decisions on all matters in recommending and awarding grant funding under this program is at the Department’s absolute discretion”.

Minister for Industry Support and Recovery Ben Carroll will make the final grant decisions. Applications for the program open in mid-September and closes on June 30, or when funds have been exhausted.

Hanwha is also among the final two bidders for the Commonwealth’s multibillion-dollar LAND 400 Phase 3 Infantry Fighting Vehicle Program.

Mr Carroll said that the funding will help local businesses benefit from Hanwha’s manufacturing activity in the state.

“This funding is about maximising opportunities for local businesses and manufacturers to enter Hanwha’s supply chain, ensuring more Victorian-made components are used in the company’s products worldwide,” Mr Carroll said.

“The Supply Chain Uplift Program is aimed at lifting standards across Victorian SMEs and making them more competitive suppliers to Hanwha, securing more local jobs and setting them up for other lucrative contracts.”

Hanwha Defense Australia chief executive Richard Cho said “the Land Systems Fund from the Victorian Government will allow Hanwha Defense Australia to invest in both our growth and that of our supply chain”.

Construction on a $170 million Armoured Vehicle Centre of Excellence at the Avalon Airport Industrial Precinct began in April 2022. Production of the howitzers is expected to begin in late 2024. The Victorian government estimates that local businesses in Geelong will benefit from $200 million of flow-on investment from the establishment of this centre.

A memorandum of understanding between Hanwha and the state government was signed in January 2021 to support its manufacturing activity in the state. Hanwha Defense Australia’s headquarters is in Melbourne. The state’s defence sector is worth $8.4 billion annually.

Do you know more? Contact James Riley via Email.

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