Marine tech manufacturer VEEM (ASX: VEE) has received an order from defense contractor BAE Systems Australia to manufacture two propeller blades and a hub under the demonstrator program for the Hunter Class Frigate Program (HCFP).
The contract is worth $1.7 million, aimed to be completed by Q2 2024. The completion will ensure that VEEM qualifies as a supplier to the HCFP with export potential to the T26 Global Combat Ship platform. Contract award for the propeller and brake blade manufacture for the first batch of three Hunter class frigates is anticipated in 2024/5.
In early 2022, the Company successfully delivered the initial pilot propeller blade. In doing so, it ticked off the first ‘targeted task’ in qualifying as a supplier for Kongsberg Maritime.
VEEM Managing Director, Mark Miocevich, commented, “VEEM is proud to be working towards qualification where we will be one of only two suppliers globally for the Hunter Class Frigate Program. We look forward to working with BAE Systems Australia and Kongsberg Maritime to meet the challenges of this next targeted task, with the goal of becoming a supplier for the Hunter Class Frigate Program and the Type 26 frigate program globally.”
VEEM Limited designs and manufactures high-tech marine propulsion and stabilisation systems for the global luxury motor yacht, fast ferry, commercial workboat and defence industries. The HCFP is targeted towards the Australian Navy and comprises heavy frigates that will replace the Anzac class. The fleet will be used for a wide range of things, from fighting war to humanitarian reasons.
Upon successful completion of the new Demonstrator Project, VEEM would be one of only two suppliers globally for the T26 Global Combat Ship. The T26 is the reference ship design for the Hunter class frigate.
The order is referred to as a “targeted task” to those in the know, which comprises us now. This new venture will tell the world that VEEM is more than just a luxury yacht manufacturer, that it does more than dazzle. As per its announcement, this order will formally demonstrate that the Company has the propeller manufacturing capability to deliver into the HCFP supply chain.
VEEM is a world leader in premium commercial propellers and has delivered similar blades to defence clients globally. Under the guidance of Kongsberg Maritime, one of the platform suppliers for the T26 Global Combat Ship, VEEM will manufacture two propeller blades and a hub.
The success of this project might open up an ocean of new possibilities for VEEM. It could lead to the export of equipment for other naval shipbuilding programs around the world, including other T26 programs. In the coming months, BAE Systems Australia is expected to issue a ‘request for proposal’ for the propeller and brake blade manufacture for the first batch of three Hunter class frigates.
Miocevich concluded, “VEEM qualifying as a supplier will contribute significantly to maximising industrial capability in Australia. As a long term supplier of components for submarines, surface ships and warships to the Royal Australian Navy and having supplied more than $200m worth of defence products since 1987, VEEM is committed to the supply of Australian-made propellers.”
VEEM had a rocky FY22, witnessing a decline in profit to $1.3 million from over $4 million in FY21, as the Company battled supply chain issues and staff contracting Covid. However, its propellers and investments into super yachts saved the day. Will this new defense contract be the wind in its sail?
Alinda is a Business Reporter for The Sentiment
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